SMEs expected to contribute 41% to Malaysia's GDP by 2020

The Malaysian government said it aims to increase SMEs' contribution to the country's GDP from 37.1% last year to 41% in 2020. It also plans to expand the export share of SMEs from 17.3% in 2017 to 23% in 2020.According to the Mid-term Review of the 11th Malaysia Plan 2016-2020 report. SMEs in Malaysia constitute 98.5% of the total establishments, with majority of the businesses in the services sector (89.2%), followed by manufacturing (5.3%) and construction (4.3%). To develop resilient and sustainable SMEs, the government plans to intensify 32 initiatives, which include six High Impact Programmes under the SME Masterplan 2012-2020.Efforts will be boosted to increase productivity, empower human capital, increase the adoption of technology and innovation, enhance ease of doing business as well as improve access to financing. Other programmes including the Business Accelerator Programme will continue to aid SMEs in building capacity and capability through better capital investment and technology adoption.The "National eCommerce Strategic Roadmap" will also aid SMEs in increasing their contribution to the overall GDP to reach RM211 billion by 2020. Among the areas covered in the road map include accelerating seller adoption of e-commerce, promoting national brand to boost cross-border e-commerce and realigning existing economic incentives.Also, the Tunas Usahawan Belia Bumiputera Programme and Bumiputera Enterprise Enhancement Programme will further strengthen entrepreneurship skills among the Bumiputera community. Meanwhile, microenterprises can also turn to Program Pembangunan Usahawan Mikro for support in establishing businesses.The report added that grants and soft loans are made available to support all categories of SMEs. Opportunities for SMEs include Soft Loan Scheme for Automation and Modernisation, Financing Programme for SME and Vendor Financing Scheme, while microenterprises can turn to programmes under TEKUN Nasional and Amanah Ikhtiar Malaysia for financial assistance.Moving forward, the access to financing for SMEs will shift towards the development of more non-traditional financing avenues and platforms. These include crowdfunding, peer-to-peer financing, Leading Entrepreneur Accelerator Platform Market, Investment Account Platform, venture capital and angel investors. The government will also formulate a new long-term plan to chart SME development beyond 2020, including policy directions, strategies, action plans and programmes. This is in a bid to uplift SMEs to be on par with those in developed countries."The masterplan will identify new opportunities and challenges to be addressed by taking into account the changing demographics, economic and business landscape. In addition, it aims to equip SMEs with the necessary technology and knowledge in line with megatrends, particularly in the advent of the fourth Industrial Revolution," the report added.